Cummins Inc (CMI)
Cummins is a Columbus, Indiana based multinational corporation that designs, manufactures, and distributes engines, filtration, and power generation products. Cummins also services engines and related equipment, including fuel systems, controls, air handling, filtration, emission control, electrical power generation systems, and trucks.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is increasing.
- The growth rate of the primary trend is 2.74% per annum.
- CMI price at the close of July 25, 2024 was $283.17 and was higher than the top border of the primary price channel by $14.64 (5.45%).
- The secondary trend is increasing.
- The growth rate of the secondary trend is 16.80% per annum.
- CMI price at the close of July 25, 2024 was inside the secondary price channel.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of CMI price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: August 10, 2020
End date: February 5, 2024
a = 5.3022
b = 0.0001
s = 0.0778
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0001) – 1
= 2.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0778) – 1
= 36.50%
August 10, 2020 calculations
Top border of price channel:
Exp(Y262)
= Exp(a + b × X262 + 2 × s)
= Exp(a + b × 381 + 2 × s)
= Exp(5.3022 + 0.0001 × 381 + 2 × 0.0778)
= Exp(5.4860)
= $241.28
Bottom border of price channel:
Exp(Y262)
= Exp(a + b × X262 – 2 × s)
= Exp(a + b × 381 – 2 × s)
= Exp(5.3022 + 0.0001 × 381 – 2 × 0.0778)
= Exp(5.1748)
= $176.76
February 5, 2024 calculations
Top border of price channel:
Exp(Y1,139)
= Exp(a + b × X1,139 + 2 × s)
= Exp(a + b × 1,655 + 2 × s)
= Exp(5.3022 + 0.0001 × 1,655 + 2 × 0.0778)
= Exp(5.5803)
= $265.15
Bottom border of price channel:
Exp(Y1,139)
= Exp(a + b × X1,139 – 2 × s)
= Exp(a + b × 1,655 – 2 × s)
= Exp(5.3022 + 0.0001 × 1,655 – 2 × 0.0778)
= Exp(5.2691)
= $194.25
Description
- The primary trend is increasing.
- The growth rate of the primary trend is 2.74% per annum.
- CMI price at the close of July 25, 2024 was $283.17 and was higher than the top border of the primary price channel by $14.64 (5.45%).
Secondary Trend
Start date: February 22, 2022
End date: July 25, 2024
a = 4.8414
b = 0.0004
s = 0.0688
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × 0.0004) – 1
= 16.80%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0688) – 1
= 31.69%
February 22, 2022 calculations
Top border of price channel:
Exp(Y649)
= Exp(a + b × X649 + 2 × s)
= Exp(a + b × 942 + 2 × s)
= Exp(4.8414 + 0.0004 × 942 + 2 × 0.0688)
= Exp(5.3798)
= $216.98
Bottom border of price channel:
Exp(Y649)
= Exp(a + b × X649 – 2 × s)
= Exp(a + b × 942 – 2 × s)
= Exp(4.8414 + 0.0004 × 942 – 2 × 0.0688)
= Exp(5.1046)
= $164.77
July 25, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(4.8414 + 0.0004 × 1,826 + 2 × 0.0688)
= Exp(5.7559)
= $316.05
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(4.8414 + 0.0004 × 1,826 – 2 × 0.0688)
= Exp(5.4806)
= $240.00
Description
- The secondary trend is increasing.
- The growth rate of the secondary trend is 16.80% per annum.
- CMI price at the close of July 25, 2024 was inside the secondary price channel.